CPA: Ten Reliability Concerns about Farm Bureau Report on TPP

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FOR IMMEDIATE RELEASE

February 26, 2016 
Contact: Paola Masman, Media Director 
202-688-5145 ext 2, paola@prosperousamerica.org

Washington ~ The Coalition for a Prosperous America (CPA) today raised concerns about the reliability of a recent advocacy document released by the American Farm Bureau Federation (AFBF) purporting to show increased farm income if the Trans-Pacific Partnership is adopted. The highlight of the release is that US farm income will increase by $4.4 billion by some future date if the TPP is adopted. Following are ten concerns CPA has about the AFBF analysis' credibility:

            1.         Past AFBF Projections Were Wrong: Farm Bureau has been overly optimistic when projecting trade deal results for US agriculture. For the Korea-US trade agreement, AFBF claimed that US agriculture would be a “net gainer” in agricultural commodity trade with that country. However, the opposite resulted. The US net export performance substantially worsened between 2011 (the year before the implementation of the Korea-US pact) and 2015.

            2.         Undisclosed methods: The economic model used is not revealed and is thus not replicable. From what is discernible, the same methods that produced inaccurate Korea-US trade agreement results were used in this report.

            3.         Undisclosed authors: The authors of the underlying study, giving rise to the AFBF advocacy document, are not revealed. We do not know their level of competence.

            4.         Undisclosed data: The data sets relied upon for the AFBF advocacy document have not been revealed. We do not know if those data sets are reliable or were interpreted and applied properly.

            5.         Unreasonable meat demand assumptions: The report assumes, without proof, that future TPP country population growth will translate into increase demand for US beef and pork rather than domestic sources. TPP country Vietnam, for example, consumes fish protein and is a major exporter of fish sold in the US. Non-TPP country China has a food self-sufficiency objective.

            6.         Failure to consider Japan pork subsidies: The AFBF document assumes increased US pork market share in Japan. It fails to consider that Japan’s pork tariff cuts will, combined with its subsidy program, continue to keep foreign pork penetration from its domestic market. Japan’s controversial program has been highlighted in a recent, high-profile letter from 28 pro-Fast Track House members at the request of multinational pork packers.

            7.         Unreasonable assumptions of disproportionate US meat export market share: The report assumes that the US will benefit from any increased TPP country demand, without properly considering products from competing major agricultural countries like Canada, Australia, Mexico or non-TPP countries that could fill that demand.

            8.         Failure to consider causes of agricultural price levels: The AFBF report does not include consideration of the primary causes of price levels for farm and ranch products. Those primary causes include, for example: the cattle cycle, weather, disease, ethanol, currency values, and energy prices. Each of these factors has a far larger impact on pricing than any TPP provision.

            9.         Omitted US import considerations: The report fails to examine imports from other TPP countries. Any model that only examines exports is per se wrong. Agricultural imports to the US from TPP countries reduce US market share in the domestic market and thus lower farm and ranch prices.

            10.       Failure to consider global crop pricing and demand facts: The AFBF document assumes that increased TPP country demand for oilseeds, rice and other crops would substantially be met by US products. However, other agricultural countries like Brazil and Argentina consistently export crops at slightly under the US price, whatever the US price may be. The US is and has been a residual supplier for this reason. The TPP will not change that global pricing dynamic.

Congress and the public need reliable data and analysis when determining whether the TPP will harm or benefit the US economy. Without clarifying the above mentioned concerns, the AFBF report should not be relied upon when considering the TPP impact on agriculture, farmers and ranchers.

The Coalition for a Prosperous America is a nonprofit organization representing the interests of 2.7 million households through our agricultural, manufacturing and labor members.

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  • commented 2016-02-28 17:30:26 -0500
    Most predictions of success with trade bills have fallen far below expectations